Baupost Group Holds 35% Stake In Keryx Pharmaceuticals

Baupost Group Holds 35% Stake In Keryx Pharmaceuticals

Baupost Group, the investment management firm headed by Seth Klarman increased its stake in Keryx Pharmaceuticals based on its latest 13D filing with the Securities and Exchange Commission (SEC).

Based on the filing, Baupost Group, SAK Corporation, and Mr. Klarman beneficially own 42,016, 276 shares or 34.61% of Keryx Biopharmaceuticals.

The investment management firm previously acquired 25,791,678 shares of the biopharmaceutical company at an aggregate purchase price of $353,324,326.69.

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Investment details

On October 14, some of its investment limited partnerships advised by Baupost Group agreed to purchase Keryx Biopharmaceuticals’ Zero Coupon Convertible Senior Notes due to 2020 for $125 million. The Notes are convertible into a combination of cash and common stock.

According to Baupost Group, the Notes are convertible to a maximum of 16,224,598 shares at a conversion rate of 267.3797. The remaining principal amount is convertible into cash. The investment management firm said it may only exercise the cash conversion portion of the Notes on and after July 1, 2016, except under limited circumstance.

The Notes will only be convertible into shares of the common stock of Keryx Biopharmaceuticals after the approval of its shareholders. The biopharmaceutical company agreed to obtain stockholders’ approval for an increase in its authorized shares of common stock that will be sufficient to convert the $125 million total amount of the Notes. Baupost Group agreed to vote in favor of such proposal

Agreement between Keryx Biopharmaceuticals and Baupost Group

Additionally, Keryx Biopharmaceuticals agreed to increase the size of its Board of Directors and appointed the executive designated by Baupost Group. The newly-appointed director will serve until the company’s next annual meeting of shareholders.

Keryx Biopharmaceuticals agreed to nominate a director designated by Baupost Groupo for election to its Board at each annual meeting as long as the investment management firm continues to beneficially own at least 20% stake in the company.

Furthermore, Keryx Biopharmaceuticals agreed to allow Baupost Group to appoint one non-voting observer to its Board as long as it continues to beneficially own at least 10% stake in the company.

Moreover, the company granted the investment management firm certain registration rights related to the Notes and any shares of common stock it beneficially own.

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